Cash, loan, lease, or PPA: how to pay for solar without overpaying
The hidden fees and loan traps that change the math, now that the tax credit is gone.
- Paying cash usually gives the biggest long-term savings, if you can afford it without draining emergency savings.
- Solar loans can include hidden “dealer fees” that make the financed price higher than the cash price.
- Leases and PPAs cost little upfront but save less and can complicate selling your home.
General consumer information, not financial advice. Compare written offers carefully and consider talking with a trusted financial advisor before signing a long-term agreement.
Two homeowners can install the same panels on the same kind of roof and end up with very different results, simply because of how they paid. Financing choices affect your total cost, what happens when you sell, and how much risk you carry. With the homeowner tax credit gone in 2026, there’s less room for a bad financing deal to hide.
The options side by side
| Option | Upfront cost | Who owns the panels | Long-term savings | Main risk |
|---|---|---|---|---|
| Cash | Full price | You | Usually highest | Ties up savings |
| Solar loan | Little or none | You | Moderate to high | Hidden fees, payment jumps |
| Home equity loan or HELOC | Little or none | You | Moderate to high | Your home secures the debt |
| Lease | Little or none | Solar company | Lower | Escalators, home-sale transfer |
| PPA | Little or none | Solar company | Lower | Rate increases, home-sale transfer |
| PACE financing | None | You | Varies | Lien on your property taxes |
Paying cash
- No interest or financing fees
- Often the lowest price; ask for a cash discount
- Simplest when you sell
- A large amount of money at once
- Money not available for emergencies
Cash makes sense if you can pay without touching your emergency fund. Without the federal credit, payback takes longer, so be realistic about how long you’ll stay in the home.
Solar loans
- Own the system with little money down
- Monthly payment can be similar to your old electric bill
- Dealer fees can inflate the price
- Some loans have built-in payment jumps
- Often a filing tied to your property
Watch for dealer fees. Many solar lenders charge the installer a fee to offer a low advertised interest rate, and that fee is often built into the price you pay. The Consumer Financial Protection Bureau has flagged these fees as a common way the financed price ends up well above the cash price. Ask every installer for the cash price and the loan price in writing, and compare the total you’ll repay.
Watch for re-amortization. Many solar loans were designed around the old 30% tax credit: you were expected to pay a lump sum, usually your tax refund, by a deadline such as month 18. If you don’t, the payment resets higher. With the homeowner credit gone, ask directly whether the loan has this feature and what your payment becomes if you don’t make an extra payment.
Home equity loans and HELOCs
These can carry lower interest rates than many solar loans, and there’s no installer dealer fee. But your home is the collateral, so falling behind puts your house at risk. HELOCs often have variable rates that can rise over time.
Leases and PPAs
- Little or nothing upfront
- The company usually handles maintenance
- The company may pass along part of its own tax benefit
- You don’t own the panels
- Payments may rise every year
- Selling your home gets more complicated
Leases and power purchase agreements are now the main way homeowners indirectly benefit from federal solar incentives, because the solar company, as owner, may still claim a business credit. Ask how that shows up in your price. Before signing, work through our 9 questions to ask about a solar lease or PPA.
PACE financing
Property Assessed Clean Energy (PACE) financing is repaid as an extra charge on your property tax bill. It’s available only in some states and counties. Because it’s tied to your property, it can have priority over your mortgage, and many lenders require it to be paid off before you sell or refinance. Missing payments can put your home at risk the same way unpaid property taxes would. If someone offers PACE, read every disclosure and talk to your mortgage servicer first.
How to compare offers fairly
- Get a cash price from every installer, even if you plan to finance.
- Total it up. For loans, use the total of payments on the disclosure. For leases and PPAs, add up every payment over the full term, including escalators.
- Estimate savings conservatively. Use today’s utility rates and your utility’s current net metering rules.
- Plan for selling. Ask what happens to each option if you move in five or ten years. See selling a house with solar panels.
Ask every lender or installer:
- What is the cash price, and what is the financed price?
- Is there a dealer fee, and how much is it?
- Does the payment change if I don’t make a lump-sum payment by a certain date?
- Is there a prepayment penalty?
- Will any lien or public filing be recorded against my property?
Common questions
Is a 0% or very low-rate solar loan a good deal?
Not necessarily. A low rate often comes with a large dealer fee built into the price. Compare the total of payments with the cash price to see what the loan really costs.
Should I lease or buy now that the tax credit is gone?
It depends on your budget, how long you’ll stay, and your utility’s rules. Buying usually saves more over time; leasing reduces upfront cost and maintenance worries. Our guide to whether solar is still worth it in 2026 can help you weigh it.
Where do I complain about a solar loan?
You can submit a complaint to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint, and to your state attorney general. See our list of solar sales red flags for warning signs.
Sources: Consumer Financial Protection Bureau; U.S. Department of Energy Homeowner’s Guide to Solar Financing; Federal Trade Commission. Updated October 2026.